Rio Tinto Extends Riversdale Offer; JB Hi-Fi to Buy Back 10% Stock

Marcus Jacob
29 Mar, 2011
New York City

Fractional gains in commodities prices lifted Australian index. Rio Tinto extended its Riversdale Mining offer for the fourth time and said it acquired consent of 41.04%. The extended offer also increased the offer price to A$16.50 a share.

[R]5:00 PM Sydney – Fractional gains in commodities prices lifted Australian index. Rio Tinto extended its Riversdale Mining offer for the fourth time and said it acquired consent of 41.04%. The extended offer also increased the offer price to A$16.50 a share.[/R]

Australian stocks closed higher tracking the overnight gains in New York trading and optimism in the Asian markets.

The ASX 200 index traded up 22.20 to close at 4,755.80 and All Ordinaries Index increased 19.30 to 4,851.20.

The Australian dollar closed slightly lower at US$1.0245 and crude oil declined US$1.35 to US$103.49 a barrel.

Rio Tinto said it has acquired 41.04% of Riversdale Mining but short of the majority and extended the deadline for its offer for the fourth time.

The mining giant is locked in a battle with Tata Steel of India and Brazil’s CSN to gain the control of coking coal miner with a significant presence in Mozambique.

CSN increased its stake in Riversdale to 19.9% and Tata Steel increased its stake 2.7% to 27.1%.

The revised offer from Rio Tinto has now pushed to deadline to April 6 and noted that if it acquired 47% of the company it will pay $16.50 otherwise it will pay $16 a share.

Stock Movers

Rio Tinto increased 45 cents to $82.28 after the company proposed to turn its US$4.1 billion offer for Riversdale Mining unconditional as it won more support of institutional shareholders.

Riversdale has been halted at $16.10.

BHP Billiton increased 25 cents to $44.70 and Newcrest Mining Ltd fell 0.7% to $38.52.

Woodside Petroleum increased 50 cents to $47.60 and Santos Ltd added 1 cent to $15.56.

JB Hi-Fi gained $1.37 to $19.83 after it proposed to buy back up to 10% of its stock and will take on more debt to repay shareholders.

The company said it will expand its debt facility by $105 million to $250 million. The company also confirmed that it expects to payout 60% dividend ratio for the “foreseeable future.”

The electronics retailer also affirmed its full year 2011 after-tax earnings between $134 million and $139 million.

Telstra increased 2 cents to $2.76 after its telephone directory division Sensis said revenues will decline in low single digit before the growth begins in 2014. Sensis hopes its bundled digital and print listing will halt the slide.

Sensis chief executive Bruce Akhurst said revenues in “2011 will decline in mid single-digit and earnings will decline in high single-digit” and “see similar trends in 2012 and 2013.”